Hong Kong shares close morning slightly lower

Share prices closed a relatively lacklustre morning session slightly lower, with trade locked in a fairly tight range as a lack of solid leads kept most players on the sidelines, dealers said.

They said most China-related counters were subject to profit-taking, having rallied sharply yesterday on news the Chinese government is putting plans to sell state shares on hold.

However, gains in select property counters, supported by continued positive sentiment which stemmed from the government's plan to restructure the local housing authorities, helped stem losses, they added.

The Hang Seng index closed the morning down 13.30 points or 0.12% at 10,644.04, off a high of 10,687.04 and a low of 10,632.16, on turnover of just 2.934 billion hkd.

The Hang Seng June contract was at 10,628 points.

The China Enterprises index was down 21.22 points at 2,164.79 and the CAC index 2.72 points lower at 1,201.01.

The GEM index was down 0.34 points at 181.57 on turnover of 35.643 million hkd.

The Tracker Fund was steady at 10.75 hkd.

Tung Tai Securities associate director Kenny Tang noted investors erred on the side of caution throughout the session ahead of the expiry of the Hang Seng June contract Thursday and the release of third-quarter Tracker Fund units next week.

"Trade has been very thin this morning and the trading range has been very tight. I would expect to see this continue over the next few trading sessions," he said.

"There has been no news to stimulate buying interest," he added.

Of the property stocks, Cheung Kong was up 0.25 hkd at 66.75, Swire Pacific up 0.25 at 66.75 and Sun Hung Kai Properties up 0.75 at 59.25 on technical support, Tang said.

Telecommunications stocks were little changed, with Hutchison Whampoa steady at 59.00, PCCW down 0.01 at 1.86, China Mobile flat at 23.05 and China Unicom down 0.05 at 6.30.

Of the financial stocks, HSBC was down 0.75 at 88.50, Hang Seng Bank up 0.50 at 84.00 and Bank of East Asia 0.10 lower at 15.95.

H-shares were pressured by profit taking, with Maanshan Iron down 0.02 at 0.69, Jiangxi Copper 0.05 lower at 1.05, Yanzhou Coal off 0.10 at 3.10 and Angang Newsteel down 0.02 at 1.21.

Of the red-chips, TCL International was off 0.10 at 2.25, Brilliance China down 0.03 at 1.23 and China Travel 0.05 lower at 1.47.

Biotech stocks found support after news CK Biotech Laboratory Ltd, a unit of Cheung Kong's pending spinoff CK Life Sciences, has successfully developed 15 bioremediation products, dealers said.

Hong Kong Pharmaceutical gained 0.06 to 1.14, LifeTec Group was up 0.015 at 0.315 and Global Bio-chem was 0.05 higher at 2.925.

On the GEM Board, Tom.com was flat at 3.40 and Sunevision steady at 1.46.

Elsewhere in the market, First Pacific was up 0.03 at 1.54 as speculation continued over the company's ability to complete a deal to sell its stake in PLDT.

Giordano was 0.10 higher at 4.275 on bargain hunting interest.